NZ manufacturing opens 2026 in solid expansion territory, with production and new orders leading, though confidence softens.
Summary:
January PMI: 55.2 (vs 56.1 prior)
Remains well above 50 → solid expansion
Production and new orders lead gains
Employment expands for third straight month
Positive commentary drops sharply
Signals economy has likely turned the corner
New Zealand’s manufacturing sector began 2026 on firm footing, with the latest BNZ–BusinessNZ Performance of Manufacturing Index showing continued healthy expansion.
The seasonally adjusted PMI for January printed at 55.2, easing 0.9 points from December’s 56.1 but remaining comfortably above the long-run average of 52.5. Readings above 50 indicate expansion.
All five major sub-indices remained in growth territory. Production (56.6) and New Orders (56.4) again led the expansion, while Deliveries (53.3) and Employment (52.9) also posted gains. Employment has now expanded for three consecutive months, something last seen in early 2025.
However, the tone beneath the headline softened. The share of positive comments from survey respondents fell to 47.7%, down sharply from 57.1% in December. Manufacturers cited weak demand and seasonal distortions, with Christmas and summer shutdowns disrupting production and pushing orders into the new year.
Economists note the result aligns with broader indicators pointing to an improving economic backdrop. While momentum cooled slightly from December’s strong finish, the PMI remains consistent with forecasts for a gradual recovery in growth through 2026.
Overall, the survey suggests manufacturing activity is expanding at a solid clip, even if confidence and demand conditions remain uneven.
